BUSINESS AND POLITICS IN THE MUSLIM WORLD GULF COOPERATION COUNCIL NEWS MONITORING REPORT

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1 BUSINESS AND POLITICS IN THE MUSLIM WORLD GULF COOPERATION COUNCIL NEWS MONITORING REPORT MADIHA KAUKAB Weekly Report. # th July- 16th July 2010 Following news monitoring report is based on the important political, social, economic and Geostrategic events occurred in Gulf Cooperation Council States along with a Comprehensive summary of the report. SUMMARY The six-nation Gulf Cooperation Council (GCC) has finalized a plan to set up a human rights panel in the region. This new regional commission for human rights, which will have independent and impartial experts as its members and office bearers, will deal with human rights issues and ensure more accurate auditing of the human rights records in the region. The move to set up this regional panel comes following a recommendation made by the GCC foreign ministers in a meeting last month, said a statement released by the GCC General Secretariat on Wednesday. The foreign ministers of the GCC member states have endorsed the plan for the regional commission, which will be the first regional body of its kind in this part of the world. The endorsement to create this regional body is an important step forward in the establishment of the new mechanism to protect rights of the Gulf citizens and ensure more protection to the growing number of migrant workers, said a GCC human rights official, who preferred to remain anonymous. Saudi civil airliner touched down in the main southern Iraqi city of Basra on Thursday on the first such flight between the neighbouring countries since Iraq s 1990 invasion of Kuwait. The Alwafeer Boeing 747 flew into Basra at 8:15 am (0515 GMT) from the western Saudi city of Jeddah, gateway to the Muslim holy places, but there were no passengers on the incoming flight. On its return trip, the plane was to carry 450 Iraqis intending to make the lesser pilgrimage, or Omra, to Mecca and Medina. For years Iraqi pilgrims have had to make the long overland bus journey to the Muslim holy places or pick up a flight to Jeddah in a neighbouring country. I am very happy to have landed in Basra airport and to have piloted the first Saudi flight to touch down in Iraq for such a long time, said the plane s captain, Ghassan Hakim. The President Shaikh Khalifa bin Zayed Al Nahyan has lauded the Assilah Festival in Morocco as a cultural initiative that fosters the language of dialogue, implants values of tolerance and acts as a bridge of cultural communication between the North and South. The selection of Renewable Energy as the theme of the 32nd Assilah Festival underlines the philosophy of the festival by establishing culture as a container for development, Shaikh Khalifa said in an inaugural address read on his behalf at at the opening of the festival by Abdul Rahman Mohammed Al Owais, UAE Minister of Culture, Youth and Community Development. Shaikh Sultan bin Zayed Al Nahyan, the President s Representative, attended the opening ceremony of the festival during which the UAE was declared as the Official Guest of Honour for the festival, which runs from July 10 to July 27. Shaikh Khalifa congratulated King Mohammed VI of Morocco on his 11th accession day, and highlighted the depth and strength of the UAE- Morocco ties. This year s

2 session, the UAE President, added, provides an ideal opportunity for the UAE to apprise the participants of its efforts in deployment of renewable energy and its civilisational, historic, cultural and heritage contributions. Conditions along the Kuwaiti-Iraqi border are calm and very normal, a senior official affirmed on Thursday. Minister of State for Cabinet Affairs and Acting Foreign Minister Roudhan Al-Roudhan said in a statement to KUNA, Iraq has affirmed its full abidance by the relevant Security Council resolutions. He was alluding to a statement made earlier today by Iraqi Foreign Minister Hoshyar Zebari stressing on Iraq's adherence to the relevant Security Council resolution regarding the Kuwaiti-Iraqi border. Demarcation of the border between Kuwait and Iraq was decisively settled with the council resolution 833, it is a compelling resolution for the two countries, he said, calling for abstention from any bids aimed at straining the ties between the two brotherly countries. Oman gives top attention to its ties with India because of the historical and geographical links between the countries, a key Omani official said. National Economy Minister Ahmed bin Abdulnabi Macki also said the many development projects planned to be carried out in the sultanate would create more job openings for Indian workers. We, in the Sultanate of Oman appreciate and respect the Republic of India and its people for their continuous contribution in the construction and development being witnessed by the sultanate, he said while visiting the Sultan Qaboos Library at the Islamic Centre in New Delhi on Tuesday. Macki is currently on an official visit to India. Despite the different religions and political parties in the Republic of India, it is a country that enjoys much respect and appreciation from all nations because of its political and social security and stability, he said. Macki toured the library and familiarised himself with the services it rendered. The library contains collections of books on Oman and Islam and Islamic scripts covering a host of topics such as culture, science, geography and history. The Shoura Council approved the 9th Development Plan in its session Sunday with a margin of just one vote after 75 members voted for the plan while 41 others opposed it. The voting screen remained open about three minutes until council member Majdi Al-Hariri entered and cast the 75th vote. The 9th Development Plan, prepared by the Ministry of Economy and Planning, includes priorities to continue improving citizens standard of living, develop national manpower, achieve balanced development in different regions, develop the national economic structure and upgrade the competitiveness of national products in national and international markets. The Shoura Council also approved a proposal that follow-up execution reports contain detailed explanations of the execution mechanism s efficiency, attach timetables for achieving goals and provide means to address causes for stalling of projects or inefficiency in executing and achieving objectives. Approval included a provision for executive authorities to revise the capital requirements to ensure provision of basic needs such as land, services, raw materials, human resources and qualified contractors on condition that they become binding conditions in the next development plan. Social development authorities are going for stricter penalties to curb juvenile crimes, a move that follows the sentence of 10-year imprisonment in a juvenile prison awarded by the juvenile court to a minor who killed his friend Ali. Khalil Al Braimii, head of the juvenile centre and girls social education, said that the case of Ali s murder by the minor shook the Emirati society, pointing out that last year were witnessed three murder cases by juveniles who used knives and swords for committing the crimes. Parliamentary elections in Bahrain later this year will offer little to Shia opposition groups pressing for more democratic reforms, and are unlikely to heal their rift with the country s Sunni Muslim rulers. The election for parliament s lower house, likely in October or November, will be the third in the Gulf Arab

3 state since its king launched a reform process a decade ago to help to quell Shi ite street protests of the 1990s. Bahrain s main Shia opposition group Al Wefaq, which holds 17 seats in the 40- member body, is expected to contest the elections hotly although analysts say they are unlikely to alter the balance significantly in Bahrain s only elected national body. The elections will maintain the status quo as it is, without causing significant improvement or deterioration of the situation, said Mansoor Al Jamri, editor-in-chief of the opposition daily Al Wasat. Bahrain, a close ally of Washington and Riyadh, is ruled by the Sunni Muslim Al Khalifa family while the majority Shia population often complains of discrimination in jobs and services, a claim government officials deny. Reforms instituted by King Hamad bin Isa Al Khalifa led to a new constitution and parliamentary elections in 2002 and 2006, easing some Shi ite demands, although ultimate authority still rests with the ruling family. By law, the next election must be held by the end of the year, and most analysts expect it to take place after the end of the Islamic holy month of Ramadan in September but before the Haj pilgrimage season begins in November. The European Union (EU) and the Gulf Cooperation Council (GCC) have agreed to hold an "economic dialogue" every year to boost and expand economic and trade cooperation and relations between the two major regional blocs. The agreement came following the second EU- GCC Economic Dialogue which ended here late on Monday. "The dialogue is rolling again. The last one was in This dialogue is very important. We have decided to have this dialogue annually," Adnan al-kandari, Director of Directorate of Economy at Kuwait's Finance Ministry, told Kuwait News Agency (KUNA) in an interview. Al-Kandari chaired the meeting from the GCC side as Kuwait holds the current GCC Presidency. "We will see what will be on the agenda of the next meeting. It depends on the latest developments in the economic situation," he added. On his part, Peter Bekx, Director for international economic and financial affairs at the European Commission who led the EU side, said "the meeting was very constructive, very useful." "We exchanged views on a number of very important issues like how to exit from the economic crisis, and monetary and regional integration. I think we both can learn from each others' experience," Bekx told KUNA. "The atmosphere was very open. We have been able to learn a lot from each other. Both parties very definitely agreed to continue with the normal pattern of having the meeting every year. So next year we will meet again," he noted. "We have seen over the past a positive development in the economic relations so I would expect that to continue in the interest of both the GCC and the EU," added the EU official. Saudi Arabia's hydrocarbon sector optimism has increased substantially for the third quarter, while the Kingdom's economy is marching ahead and projected to rebound sharply during the current year. The same trend of growth in the Saudi economy will continue during the next two years because of higher oil production and heavy public spending as well as support extended by government agencies and private sector. Addressing a press conference on the occasion of the release of Business Optimism Index for Saudi Arabia for the third quarter of 2010 here Tuesday, Said Al-Shaikh, senior vice president and chief economist of the National Commercial Bank (NCB), said that the composite optimism index for hydrocarbon sector has improved significantly. Pawan Bindal, associate director of Dun & Bradstreet, was also present during the ceremony. The UAE is considered one of the world s most commercially open countries, where the percentage of nonoil foreign trade in relation to GDP reached 73 per cent in 2009, a study by the Ministry of Foreign Trade, or MoFT, revealed. This indicates the degree by which the UAE s economy is interlinked with the world s economies through its numerous commercial ties, and affirms the important role the UAE can play in the commercial and economic world order. The MoFT has

4 issued an analytical study of the UAE s Foreign Trade Structure in terms of geographic concentration between , in addition to the first quarter of the current year. he Sultanate s Government and the Government of India on Wednesday signed an agreement to set up the Omani-Indian Joint Investment Fund between the State General Reserve Fund(SGRF) and the State Bank of India (SBI) with a paid-up capital of $ 100 million equally. The agreement was signed in the presence of HE Ahmed Bin Abdulnabi Macki, National Economy Minister and Deputy Chairman of the Financial Affairs and Energy Resources Council, his accompanying delegation, HE Pranab Mukherjee, Finance Minister of India, and a number of officials in the Indian government. The agreement was signed on behalf of the SGRF by Warith Bin Mubarak Al Kharousi, Chief Executive Officer of the fund, while Om Prakash signed for the SBI. Macki stressed the importance of the role to be played by the fund in enhancing research fields for new Omani-Indian joint investments in various economic sectors. He said the Sultanate has many investments in India in the telecommunications and real estate services sectors before setting up the fund worth $ 200,000,000. There are joint investments between Indian companies and Oman Oil Company in the Omani- Indian fertilisers project in the Sultanate and the refinery project Pena in Madhya Pradesh, India. Kharousi said by setting up the fund with SBI, SGRF will enhance the fields of the Sultanate s foreign investments. He said the fund will enhance the investment opportunity in the markets in India which are witnessing growth in various sectors. Saudi industrialization and energy services company Taqa is considering investing $ 1.6 billion in pipelines and $ 133 million in offshore platforms in Qatar and Iraq. Officials from Taqa was quoted in a published report Friday saying that the company was considering investing in the gas industry in Qatar and the oil industry in Iraq by building platforms and pipelines for companies already working in the two countries. Taqa has invested SR500 million in offshore oil and gas platforms in Saudi Arabia. Officials said interest has increased since one of the company s main partners, the Italian oilfields services company Saipem, won a $ 10 billion contract to develop fields in southern Iraq. Meanwhile, New York s main contract, light sweet crude for delivery in August, rose 65 cents to $ a barrel. Brent North Sea crude for August gained 71 cents to $ GCC GCC to set up human rights panel Attiyah questions timing of ICC warrant against Sudanese leader GCC denounces Israeli plan of building 32 new settlements in E. Jerusalem Prospects of joint GCC N-plant fade Global weakness dampens GCC stock markets GCC eyeing $ 17b transport projects over next 15 years Second EU-GCC economic dialogue begins in Brussels Monday EU, GCC determined to expand economic cooperation Weak lending as GCC banks remain risk-cautious YEMEN Kuwait's support for Yemen development lauded Yemen hopes to see implementation of judicial accord with Kuwait

5 SAUDI ARABIA International Front Saudi civil aircraft in first flight to Iraq in 20 years Saudi-French ties highlighted Qatar Emir meets King Abdullah Sarkozy discusses bilateral, regional ties with Saud Al-Faisal Saudi Arabia top terror finance fighter Call to boost Saudi-Japan investments in education field Social Front Saudis marrying abroad to commit to foreign law Saudi removes chief judge of security court: report Saudi Shoura approves 9th Development Plan Forcing workers to toil in extreme heat is 'haram' in Islam: Saudi scholar Drive to warn of dangers of marrying abroad New labor bill in offing in Saudi Arabia Economy Front UAE Saudi Arabia's economy is marching ahead Saudi consumer confidence drops as cost of living rises Saudi inflation hits 13-month high Saudi launches world's first date bourse Demand for commercial space in Saudi Arabia firming once again International Front Mitchell to head for Cairo, Abu Dhabi on Sunday Assilah a cultural bridge between North and South, says Khalifa Education to bolster UK-UAE ties Social Front UAE writers slam Arab League for sacking Dhabia Khamees UAE Ministry of Justice 'can reject verdict of any court' 13,775 Emiratis admitted to national universities Stricter laws to curb juvenile delinquency: UAE authorities

6 Economy Front Mohammed endorses revamp of ministry Emirates A380 gets warm welcome in Delhi UAE petrol prices up 25% in 2010 UAE among world s most commercially open nations UAE, Morocco share commitment on renewable energy KUWAIT International Front Conditions on border with Iraq normal: Kuwaiti official Kuwait, Mexico sign memo for deliberations between foreign ministries 'Renegotiating Iraqi-Kuwaiti borders issue unacceptable' Kuwait, Antigua and Barbuda sign agreements in different domains Time ripe to bolster interaction with South America: Kuwaiti official Kuwait's political leadership cherishes Jerusalem: envoy 'Tunisia, Syria keen on putting Kuwait Economic Summit into effect' Social Front Mixed views on mandatory military service in Kuwait Public sector wages rise by 22% annually in Kuwait Kuwaiti MP warns of serious repercussions Support for enforcement of Kuwait smoking ban Kuwait development plan bringing new dynamic culture: Safar Economy Front High-level panel to be set up for development legislation in Kuwait Kuwaiti govt signs development contracts worth KD 2 billion OMAN International Front Oman, Portugal keen on enhancing ties Oman gives top attention to ties with India: minister Economy Front Oman GDP drops as recession, oil price fall bite China tops list of Omani crude oil importers Oman, India sign pact to set up investment fund

7 BAHRAIN International Front King of Bahrain meets Cameron Bahraini activists take cue from Obama campaign Social Front Bahraini MPs vow to follow up on key probes Bahrain polls unlikely to heal sectarian rift Bahraini women poll candidates trained in campaigning Economy Front BDO Bahrain is eyeing corporate finance push QATAR International Front Qatar Emir meets King Abdullah China, Qatar vow to boost military cooperation US firm to build Qatar's satellite Economy Front GCC Qatargas starts LNG production Taqa to invest in Qatar gas, Iraq oil sector Qatar's water reserves to be expanded GCC to set up human rights panel The six-nation Gulf Cooperation Council (GCC) has finalized a plan to set up a human rights panel in the region. This new regional commission for human rights, which will have independent and impartial experts as its members and office bearers, will deal with human rights issues and ensure more accurate auditing of the human rights records in the region. The move to set up this regional panel comes following a recommendation made by the GCC foreign ministers in a meeting last month, said a statement released by the GCC General Secretariat on Wednesday. The foreign ministers of the GCC member states have endorsed the plan for the regional commission, which will be the first regional body of its kind in this part of the world. The endorsement to create this regional body is an important step forward in the

8 establishment of the new mechanism to protect rights of the Gulf citizens and ensure more protection to the growing number of migrant workers, said a GCC human rights official, who preferred to remain anonymous. Attiyah questions timing of ICC warrant against Sudanese leader The Gulf Cooperation Council (GCC) Secretary General Abdulrahman Al-Attiyah questioned on Wednesday the timing of the arrest warrant decision issued by International Criminal Court (ICC) to Sudanese President Omar Al-Bashir, including the count of genocide accusation. Al-Attiyah said in a press release that ICC decision might increase tension in Sudan, particularly since the decision comes contradictory to the path of ICC mission, including regarding Arab League previous reports, and African Union reports on the issue of genocide in Darfur. GCC Chief renewed the Gulf states stance, including peace efforts and developments in of all Sudan. Last Monday, the Hague-based International Criminal Court issued a second warrant of arrest against the President of Sudan. The first warrant of arrest issued against Al Bashir on 4 March, GCC denounces Israeli plan of building 32 new settlements in E. Jerusalem The Secretariat General of Gulf Cooperation Council (GCC) denounced on Wednesday the approval by Israeli government of a plan to build 32 new settlements in East Jerusalem, describing it as a provocation which undermines the legitimacy of international resolutions and a violation of international law. A statement by GCC Secretary General Abdulrahman Al-Attiyah said that Israeli settlement polices, including the destruction of Palestinian homes will increase tension and hostility. The statement called on the international community to shoulder the responsibility and stop Israel's persistent aggression in the occupied territories, including sanctions imposed on Gaza Strip. Prospects of joint GCC N-plant fade The prospect of a joint GCC nuclear power plant for generating nuclear power for civilian purposes appears to be receding with the bloc s member countries deciding to go it alone. Ever since the six-member Gulf Cooperation Council (GCC) announced its decision, in December 2006, to go jointly for nuclear energy for peaceful purposes, Qatar has been actively involved in the initiative. It hosted a key meeting of the GCC Working Group to follow up on the International Atomic Energy Agency (IAEA) s feasibility report on such a nuclear power plant. Last April, Saudi Arabia said it was building an atomic and renewable energy city. Of all the GCC states with plans to develop nuclear programmes, the UAE has made the most progress. In December, the UAE awarded a $ 20bn contract to a consortium to help build four 1,400 megawatt nuclear power plants. The emirate has already selected a site for its power plants, Financial Times has reported. Qatar, which has hosted several IAEA-supported preparatory plans for a joint GCC nuclear reactor, also seems to be going its own way.

9 Earlier, talking to The Peninsula, a top official involved in the GCC plans had said that both options of the country going it alone or joining the GCC bandwagon were open before Qatar. However, almost one year after his statement, there are indications that Qatar is laying emphasis on its own nuclear power station. The US think tank, International Institute for Strategic Studies (IISS), says Qatar has sought to press its case for its selection as the location for a joint GCC reactor. Global weakness dampens GCC stock markets GCC markets continued to follow global cues in June, losing 1 percent versus a drop of 11 percent in May, Kuwait Financial Centre (Markaz) said on Thursday. All GCC markets saw another month of declines, except Qatar which gained 1.68 percent; losses were led by a 7.45 percent decline on the DFM (Dubai). Saudi Arabia saw the least decline, 0.44 percent, as three blue chips saw substantial monthly gains thereby mitigating the effect of SABIC and Al Rajhi Bank s losses. Crude oil gained 2 percent after tumbling 15 percent in May. Investors booked profits ahead of Q2 corporate earnings announcements. Liquidity was down across the GCC in June, as volume and value traded declined 11 percent and 24 percent, respectively. In terms of volume, all markets, excluding Bahrain, saw declines, the highest being a 42 percent decline in Qatar. In terms of value traded, UAE and Qatar led the way with declines of 30 percent each. Volatility was down in all markets, with Qatar MVX declining 47 percent, the least decline among GCC markets was 15 percent in Dubai. Pan-GCC MVX doubled in Q2 led by substantial increases in April and May. Moreover, Markaz said world markets remained in the red as continued economic uncertainty in Europe, a slowing recovery in the US and troubles in China weighed on world markets. MSCI World lost 3 percent in June after tumbling 10 percent in May, taking the YTD loss to 9 percent. On a market cap weighted basis, the US was the largest contributor with a loss of 2.8 percent. Monthly returns remained negative across the board led by Shanghai s loss of 8 percent for June; the market is down 25 percent for the year. India managed a gain of 4 percent for the month. The CBOE VIX index, as a result of the volatility of market returns, was up another 8 percent in June after spiking 45 percent in May. GCC eyeing $ 17b transport projects over next 15 years Transport projects worth $ 170 billion are expected to be put in place in the GCC region over the next years, an industry expert has said. About 85 percent of the investment is seen being made in the UAE, Saudi Arabia and Qatar while $ 108 billion of it is set to be spent on rail projects. Satish Khanna, general manager, Al Fajer Information and Services, which is staging the first GulfRail show and conference in Dubai in 2012, said that it would soon be common for a person to travel from Dubai to Jeddah or Abu Dhabi to Doha in few hours, with convenience. He added: In order to meet the pressing regional logistics demands, the next years will see transport projects worth $ 170 billion. Out of this, 85 percent will be spent by UAE, Saudi Arabia and Qatar. He added that plans to link Saudi Arabia to Europe by rail were no longer a distant dream, adding that the key driver of the rail industry for the GCC would be publicprivate partnerships. Investment opportunities in intelligent transport systems in the GCC are

10 huge. The rail sector in this region is growing rapidly. Many companies outside the region regard the upcoming rail sector in the Middle East as the most lucrative opportunity to do business, Khanna added. He said the GCC network will include one rail line of 1,970km connecting all GCC countries and Qatar via a bridge. The second line of 1,984km will stretch between Kuwait, Saudi Arabia, the UAE and end in Oman. Second EU-GCC economic dialogue begins in Brussels Monday High officials from the European Union (EU) and the Gulf Cooperation Council (GCC) will meet in Brussels on Monday to discuss ways to expand and boost economic cooperation between the two regional blocs. The second EU-GCC Economic Dialogue comes as a follow-up to the decision taken at the 20th session of the EU-GCC ministerial meeting held in Luxembourg on 14 June, Kuwaiti embassy sources told KUNA. The first Economic Dialogue between the 27- member EU and the 6-member GCC was held in Kuwait's large delegation will include high officials from the fiannce ministry, the Central Bank and the embassy in Brussels, noted the sources. Kuwait holds the current GCC Presidency and Belgium chairs the EU Presidency. EU, GCC determined to expand economic cooperation The European Union (EU) and the Gulf Cooperation Council (GCC) have agreed to hold an "economic dialogue" every year to boost and expand economic and trade cooperation and relations between the two major regional blocs. The agreement came following the second EU- GCC Economic Dialogue which ended here late on Monday. "The dialogue is rolling again. The last one was in This dialogue is very important. We have decided to have this dialogue annually," Adnan al-kandari, Director of Directorate of Economy at Kuwait's Finance Ministry, told Kuwait News Agency (KUNA) in an interview. Al-Kandari chaired the meeting from the GCC side as Kuwait holds the current GCC Presidency. "We will see what will be on the agenda of the next meeting. It depends on the latest developments in the economic situation," he added. On his part, Peter Bekx, Director for international economic and financial affairs at the European Commission who led the EU side, said "the meeting was very constructive, very useful." "We exchanged views on a number of very important issues like how to exit from the economic crisis, and monetary and regional integration. I think we both can learn from each others' experience," Bekx told KUNA. "The atmosphere was very open. We have been able to learn a lot from each other. Both parties very definitely agreed to continue with the normal pattern of having the meeting every year. So next year we will meet again," he noted. "We have seen over the past a positive development in the economic relations so I would expect that to continue in the interest of both the GCC and the EU," added the EU official. Weak lending as GCC banks remain risk-cautious The GCC banking sector still appear to be struggling despite the relatively upbeat regional economic outlook as bank lending remains weak and institutions are holding a large amount of idle cash, the latest report by National Bank of Kuwait observed. Most GCC banks remain cautious about taking on new risks, while higher provisioning continues to hit profitability, the report said The GCC banks enjoy a surplus of cash and other liquid assets, but not too many

11 sound investment or lending opportunities, at least for now. In line with the economic recovery, improvement for the banks is likely to be moderate and gradual, while at the same time providing banks with an opportunity to nurse their balance sheets back to health, said Mohammed Zaher, Senior Economist, at NBK. The report notes that the recent turmoil in global and local equity markets has damaged investment portfolios. However, the GCC countries are in a relatively good position in terms of the competitiveness of their economies, benefitting mainly from highly stable macroeconomic environments and adequate infrastructure, the report said. YEMEN Kuwait's support for Yemen development lauded Yemeni Minister of Youth and Sports Hamoud Ubad lauded here Monday Kuwait's relentless support for Yemen's unity, stability and development projects. Speaking at a meeting with outgoing Kuwaiti Ambassador in Sanaa Salem Al-Zamanan, the Yemeni minister praised the current level of Yemeni-Kuwaiti relations in all fields. He also appreciated the outgoing Kuwaiti ambassador's effort to deepen brotherly ties and cooperative bonds between Yemen and Kuwait in the youth and sports domains. For his part, Al-Zamanan reiterated his country's ceaseless support for Yemen's unity, security and stability. He also voiced Kuwait's backing to Yemeni preparations and arrangements for the 20th Gulf football tournament in November. Yemen hopes to see implementation of judicial accord with Kuwait Kuwait's Ambassador to Yemen Salem Ghusab Al-Zamanan discussed on Saturday with Yemeni Minister of Justice Dr. Ghazi Shanef Al-Aghbari means of boosting bilateral relations between the two states in the judicial sector. The minister praised during the meeting, held on the occasion of the diplomat tenure end, efforts of the outgoing ambassador for promotion of the bilateral relations and the mutual cooperation. He expressed hope that a signed judicial-legal accord, previously signed between the two countries, would be implemented. The agreement stipulates mutual extradition of criminals, fugitives, recognition of judicial rules and official contracts, judicial settlements and execution of verdicts. The implementation of the accord, Al- Aghbari said, would pave way for the promotion of the bilateral relations and unite stances of the two countries regarding terrorism, human trade and piracy and other identical international issues. SAUDI ARABIA International Front Saudi civil aircraft in first flight to Iraq in 20 years A Saudi civil airliner touched down in the main southern Iraqi city of Basra on Thursday on the first such flight between the neighbouring countries since Iraq s 1990 invasion of Kuwait. The Alwafeer Boeing 747 flew into Basra at 8:15 am (0515 GMT) from the western Saudi city of

12 Jeddah, gateway to the Muslim holy places, but there were no passengers on the incoming flight. On its return trip, the plane was to carry 450 Iraqis intending to make the lesser pilgrimage, or Omra, to Mecca and Medina. For years Iraqi pilgrims have had to make the long overland bus journey to the Muslim holy places or pick up a flight to Jeddah in a neighbouring country. I am very happy to have landed in Basra airport and to have piloted the first Saudi flight to touch down in Iraq for such a long time, said the plane s captain, Ghassan Hakim. Saudi-French ties highlighted Rich tributes were paid to the deep-rooted Saudi-French ties at the celebrations of Bastille Day, the national holiday of France, at the residence of French Consul General Chritian Nakhle on Wednesday night. Addressing guests that included Muhammad A. Tayeb, regional director of the Ministry of Foreign Affairs, other government officials, members of the diplomatic corp. and business executives, Nakhle said it was a great honor for him to host the celebrations in Jeddah for the second year. He said since last year the friendship between his country and the Kingdom has further strengthened by the high-level visits from France. Nakhle, who spoke simultaneously in French and Arabic, said responding to the requests of our Saudi friends, we have improved visa procedures. Since February 2010, we have opened a separate section to receive applications and it is operating smoothly. Tayeb responded to Nakhle s comments by highlighting the ageold relationship between the two countries. He also spoke in Arabic as well as French. Qatar Emir meets King Abdullah King Abdullah, Custodian of the Two Holy Mosques, received Sheikh Hamad Bin Khalifa Al- Thani, Emir of Qatar, at his residence in Casablanca, Wednesday. During the meeting, overall developments at the Gulf, Arab, Islamic and international arenas with special emphasis on Palestinian cause as well as prospects for cooperation between the two countries and ways of enhancing them in all fields were discussed. The meeting was attended by Prince Salman Bin Abdul Aziz, Emir of Riyadh region, and Prince Miqren Bin Abdul Aziz, chief of General Intelligence. It was also attended by Sheikh Hamad Bin Jassim Bin Jabr Al-Thani, Prime Minister and Minister of Foreign Affairs of Qatar. Sarkozy discusses bilateral, regional ties with Saud Al-Faisal French President Nicolas Sarkozy met here Tuesday with Saudi Foreign Minister Prince Saud Al-Faisal Bin Abdulaziz Al-Saud to discuss bilateral relations and developments in the Middle East region. Leaving the talks, the Saudi official said that he had had "an excellent and broad" meeting with the French leader and the two men had discussed ties between the two nations, the subject of the Middle East, "our hopes" for peace "and everything relative to this problem." They also discussed cultural questions, particularly the inauguration earlier of the day in the Louvre Museum of the "Roads to Arabia" exhibit dedicated to Saudi archaeology and history. Asked about a visit to France by King Adullah Bin Abdulaziz, the Gustodian of the Two Holy Mosques, Saud Al-Faisal said that this would certainly take place. King Abdullah cancelled a visit due here today at short notice, although both sides played down the significance of the

13 cancellation. The visit of King Abdullah "will take place when the two leaders have the time to discuss all issues," the Foreign Minister said. Saudi Arabia top terror finance fighter Saudi Arabia has won the first position among Arab countries and 10th among G20 countries in the Financial Action Task Force (FATF) report on its compliance with international resolutions on combating money laundering and terror financing. "We are happy over the international recognition of the Kingdom's efforts in fighting money laundering and terror financing," said a statement issued by the Council of Ministers following its weekly meeting here. The Cabinet meeting, chaired by Crown Prince Sultan, deputy premier and minister of defense and aviation, emphasized the danger posed by the two types of crimes to national and international financial systems. The FATF and Middle East and North Africa Financial Action Task Force have endorsed the report citing a high degree of Saudi Arabia's compliance to 40 anti-money laundering (AML) resolutions and nine anti-terror funding resolutions. "The legal AML framework in Saudi Arabia is composed of Shariah law and the Anti Money Laundering Statute. This framework effectively criminalizes money laundering as required by the FATF recommendations and international conventions," the report said. Call to boost Saudi-Japan investments in education field A Japanese parliamentarian has urged his country and the Kingdom of Saudi Arabia to boost their joint investments in the field of higher education. In a work paper presented Sunday on the sidelines of the International Book Fair in Tokyo, Toshi Aki Kiozomi stressed the great importance of higher education in development. In the paper titled Japan and Saudi Arabia: Dialogue for Future, he said Saudi-Japanese relations moved from reliance on the material to the human element. He added that diplomatic relations between Japan and Saudi Arabia started with the economic dimension of oil, but started to take other dimensions with the launch of the Custodian of the Two Holy Mosques Program for Scholarships Abroad as the relationship has moved from reliance on the material to the human element. He also spoke about the circumstances of the establishment of the Saudi-Japanese Parliamentary Union, founded in 2008, and future goals, and reviewed the policies of Japan and the joint cooperation between the two countries and its role in promoting bilateral ties, noting that higher education and its development are the primary engine of development and that the Saudi-Japanese relations must promote this aspect and launch more of joint investments in this area. For his part, Yosif Al-Shaer presented a work paper titled Saudi Arabia and Japan: from relationship to partnership highlighting the relations between the Kingdom and Japan and saying that they were exemplary in all political, diplomatic, economic, cultural and educational fields. He stressed the availability of the ingredients in the two countries to strengthen the partnership where basic and financial resources in the Kingdom and financial, technical and scientific expertise are available in Japan providing opportunities for partnership between the two friendly countries. Al-Shaer called for encouraging businessmen of both countries to forge closer ties among themselves.

14 Social Front Saudis marrying abroad to commit to foreign law The Ministry of Interior has said that Saudis abroad wishing to marry foreigners are now required to sign a commitment to the laws of the countries of their future spouses. The written pledge includes commitments to child custody laws should the marriage end in separation, as well as Islamic Shariah laws governing women in those countries. The ministry has taken the measure in response to legal action in courts abroad by foreign women against their Saudi husbands over a range of family disputes, including their children adopting the nationality of the mother in accordance with their national laws. The Ministry of Interior issues 25 permits every week for Saudis to marry foreign women. Applications are first presented to the regional Emir s Office and the applicant is asked to fully explain the reasons behind his or her request and provide information on the potential spouse. Once ministry consent has been obtained, the marriage procedures are completed through Saudi Shariah courts. The Society for the Welfare of Saudi Families Abroad Awasir has said that precise figures for Saudi families living abroad are difficult to ascertain as many marriages are not officially documented. A source said that this makes it difficult for Awasir to conduct the very work for which it was set up. Last month Awasir revealed that unlicensed marriages to Saudis, many conducted in secrecy, had left homeless or in poverty over 1,500 widows and children in 19 countries across the world. Unofficial statistics say that Saudis spend over SR50 million a year on marrying foreign women, expenses which are said to include dowries, gifts, accommodation and catering costs. Saudi removes chief judge of security court: report The Saudi government has removed the president and two other judges of the security court where secret trials are ongoing for hundreds of Islamist militants, a Saudi paper reported yesterday. Abdul Mohsen al-sheikh, president of the Special Criminal Court launched two years ago and two unnamed judges were removed by the Supreme Judicial Council, which oversees judges, without any reason given, Watan newspaper reported. At the same time, new judges were appointed to expand the special court s numbers from seven to nine to speed up the trials of militants, Watan said. The new judges were not identified, and who would become the new head of the security court was also not reported. In July 2009 the justice ministry announced it had completed the trials of 330 out of 991 people it arrested on charges of joining or supporting Al Qaeda or other radical groups. Saudi Shoura approves 9th Development Plan The Shoura Council approved the 9th Development Plan in its session Sunday with a margin of just one vote after 75 members voted for the plan while 41 others opposed it. The voting screen remained open about three minutes until council member Majdi Al-Hariri entered and cast the 75th vote. The 9th Development Plan, prepared by the Ministry of Economy and Planning,

15 includes priorities to continue improving citizens standard of living, develop national manpower, achieve balanced development in different regions, develop the national economic structure and upgrade the competitiveness of national products in national and international markets. The Shoura Council also approved a proposal that follow-up execution reports contain detailed explanations of the execution mechanism s efficiency, attach timetables for achieving goals and provide means to address causes for stalling of projects or inefficiency in executing and achieving objectives. Approval included a provision for executive authorities to revise the capital requirements to ensure provision of basic needs such as land, services, raw materials, human resources and qualified contractors on condition that they become binding conditions in the next development plan. Forcing workers to toil in extreme heat is 'haram' in Islam: Saudi scholar Forcing labourers to work in the hot summer sun is forbidden (haram) in Islam and contradicts the basic objectives of the Shariah, Dr Ali bin Abbas Al Hakami, member of the Board of Senior Ulema and member of the Supreme Judicial Council, has said. Denouncing those who give scant respect to this basic philosophy of Islamic Shariah and force labourers to toil in oppressive heat, Dr Al Hakami said in a statement that Islam orders everyone to be kind and considerate to labourers who are in the lowest strata of society. If a worker is not strong enough to carry out a given task, he should be provided with another worker to help him rather than forcing him to do the work alone, he said. He said the state has issued a regulation banning labourers from being forced to work outdoors in extreme summer temperatures and the law will be implemented next year. He stressed the necessity for individuals, companies and establishments and all sectors to comply with the directives and implement them. He said if a worker suffers harm due to working in unsuitable conditions, then he has the right to take his case to a court of law. If it is proven that the employer had forced the worker to work beyond his capacity or in very high temperatures, then the judge can issue a verdict to compensate the worker. If a worker s death is due to sunstroke as a result of being forced to work in the hot sun and there is proof of this, then the dead worker s family can demand blood-money, he said. Al Hakami said being considerate of labourers and the conditions in which they are forced to work is not restricted to a specific season; it should continue throughout the year. Drive to warn of dangers of marrying abroad A summer programme is to be launched to educate young Saudis about the risks of entering into marriage abroad, according to Dr Tawfiq Al Suwailam, chairman of the Society for the Welfare of Saudi Families Abroad (Awasir). Recently, the society warned Saudis against marrying foreigners. There are several difficulties faced by Saudi children living abroad, such as social, economic, education and health problems. Sometimes the father simply vanishes from the scene and leaves the children with their mothers, he said. We help such children by finding and certifying documents attesting to the legality of the marriage and also by helping the children to return to the kingdom and to integrate socially, so that they can become effective and productive

16 citizens, he added. Through its summer awareness programme, Awasir is planning to alert young men to the problems involved in marrying abroad. Cross-cultural marriages can be difficult because of the differences in customs and traditions, which plays a major role in divorce. When couples split up, the biggest losers are the children who end up leading a miserable life, without a proper family and environment, which has a long-term effect on their lives and mental health, Al Suwailam said. New labor bill in offing in Saudi Arabia The Ministry of Labor unveiled a new bill that would unify contracts in the private sector along with a set of measures that are to be implemented in the future. The new set of measures aims to address workplace relations between the employee and the employer in the private sector. The ministry s new measures will focus on reducing labor disputes in the workplace, especially on payment issues. It will also address issues pertaining to job transfers, especially with regard to an employee seeking to change jobs. The ministry also emphasized that the employment contract has to be made in duplicate with each party retaining a copy of the contract. The Ministry of Labor also said the new measures would include the caveat that no owner of a private sector company in Saudi Arabia s shall be able to terminate an employee from service due to health problems. Also, the employees can now combine their annual leave to their sick leave. Business owners will now be required to furnish their employees and workers the termination letter before the actual firing occurs. No owner shall transfer their employees to another location without the employee s prior knowledge unless it is expressly written into the contract and signed by both parties. The new bill states that an employee has the right to leave the job if there are any contractual violations, if the employer fails to pay the employee s salary or subjects a worker to abuse. Economy Front\ Saudi Arabia's economy is marching ahead Saudi Arabia's hydrocarbon sector optimism has increased substantially for the third quarter, while the Kingdom's economy is marching ahead and projected to rebound sharply during the current year. The same trend of growth in the Saudi economy will continue during the next two years because of higher oil production and heavy public spending as well as support extended by government agencies and private sector. Addressing a press conference on the occasion of the release of Business Optimism Index for Saudi Arabia for the third quarter of 2010 here Tuesday, Said Al-Shaikh, senior vice president and chief economist of the National Commercial Bank (NCB), said that the composite optimism index for hydrocarbon sector has improved significantly. Pawan Bindal, associate director of Dun & Bradstreet, was also present during the ceremony. Al-Shaikh also spoke about lending and loan syndications by Saudi commercial banks at the press conference. He said that the Saudi banks had not been financing overseas projects, rather they had been concentrating on domestic ones. He said that there was no significant direct impact of Greek or European financial crisis on Saudi banks.

17 Saudi consumer confidence drops as cost of living rises Consumer confidence dropped in Saudi Arabia, the latest Middle East Consumer Confidence Index (CCI) survey conducted by the Middle East s job site Bayt.com revealed. The survey, prepared in conjunction with research specialists YouGov Siraj, found that Saudi Arabia s index recorded a decline of 3.2 index points compared to the last quarter. The highest decline was recorded by Egypt which saw a drop of 5.5 points, while Lebanon recorded the largest increase of 7.6 index points, following a large drop of 12.1 index points in the last wave. In the Gulf region, Kuwait, Bahrain and the UAE all dropped in consumer confidence this quarter moving down the index by 4, 1.7and 0.5 index points respectively. Qatar, however, saw an increase of 1.7 points. In North Africa, while Egypt recorded the largest drop, consumer confidence in Morocco improved by 3.9 index points. The Consumer Confidence Index (CCI) is a measure of consumer expectations and satisfaction of various elements of the economy including inflation, job opportunities and the cost of living. Respondents were asked questions about their personal financial circumstances and how they compare to the same period last year. Overall, 35 percent of the region s respondents said their financial position is the same as last year and just over a quarter, 27 percent, said it has improved. In the Kingdom, 30 percent said they are better off than last year, 36 percent said they are in the same position as last year and 28 percent said they `re in a worse position than last year. Saudi inflation hits 13-month high Saudi Arabia s annual inflation touched a 13-month high in June, the highest in a year, official data showed Saturday. The inflation rate rose to 5.5 percent from 5.4 percent in May, the Central Department of Statistics said on its website. Consumer prices increased 0.3 percent from the previous month. Annual inflation in the Kingdom started picking up again after slowing to a twoand-a-half year low of 3.5 percent in October before rising to 5.4 percent in May, still well below a record high of 11.1 percent in July Saudi inflation is mainly made up of food and housing- related costs, Jarmo Kotilaine, the chief economist at NCB Capital, was quoted as saying by Bloomberg Saturday. The housing situation is bad, and it is a very tight market. Housing costs, which account for 18 percent of the cost of living index s weighting, rose 0.9 percent month-on-month in June and were up 9.2 percent on the year. Housing demand will reach about 2 million units by 2014, Credit Suisse Group AG said in an April report. About 57 percent of the country s population is under the age of 20 and demand will mainly come from low- and middle-income buyers. Food prices, which have the largest 26 percent weight in the basket, rose 0.6 percent month-on-month in June. They are 6.2 percent higher from June Saudi launches world's first date bourse Saudi Arabia has launched what it described as the world s first electronic palm date bourse aimed at promoting the trade of the desert fruits which account for the bulk of the Gulf Kingdom s agricultural production. Registration of date traders would start on Saturday but 10 major transactions have already been published on the new website, which was launched Sunday in Al Qasseem, the main date producing province in Saudi Arabia. More than 80 dealers have